PSC offers muted response to WAPA's criticism

ST. THOMAS - The V.I. Public Services Commission issued a tempered response Wednesday to 30-plus pages of biting criticism leveled at the commission the previous day by the V.I. Water and Power Authority.

"The Public Services Commission, as a responsible regulatory body, cannot rush to judgment; consequently, it cannot provide a detailed response to the Water and Power Authority's filing of yesterday at this time," Commission spokeswoman Lorna Nichols said in a prepared statement.

Instead, the Public Services Commission will consider WAPA's response at a public meeting within 30 days, as required by law, according to the statement.

The Public Services Commission and WAPA are at odds over several issues, including who is to blame for the territory's high electricity rates, specifically with respect to WAPA's fuel surcharge known as the Levelized Energy Adjustment Clause, or LEAC, as well as the breadth of the Public Services Commission's jurisdiction over WAPA.

WAPA Executive Director Hugo Hodge Jr. said at a WAPA board meeting on Monday that the current LEAC rate of about 41 cents per kilowatt hour is the highest ever for the territory. It accounts for about 80 percent of the cost of electricity for residential customers.

In a report last month, the Public Services Commission's consultants at Georgetown Consulting Group accused WAPA of misleading the public about why the LEAC has continued to rise.

WAPA, in its most recent petition to increase the LEAC in December, maintained that oil prices are the primary cause of the high LEAC rates.

Georgetown, in a Dec. 15 report, characterized that claim as "simply incorrect."

Instead, Georgetown blamed the rising LEAC on the deferred fuel balance and said the increases are rooted in persistent discrepancies between WAPA's projected and actual efficiencies at its electric plants.

"As stated earlier, poor plant efficiency continues to be a very major factor in the high LEAC factors that WAPA charges consumers," the Georgetown report states.

The Georgetown report says WAPA can control the problem and criticizes WAPA for failing to provide the consultants with information in a timely fashion.

When Georgetown submitted its report to the Public Services Commission, Hodge and other WAPA officials raised a number of concerns and promised a response within a week.

WAPA filed its response Tuesday, 42 days after the Dec. 18 meeting at which Georgetown made its report public.

WAPA's response complains that the Public Services Commission violated WAPA's due process rights by failing to give it 10 days' notice before the consultants' complaints were filed and said the Georgetown report contains "erroneous factual assumptions and findings" regarding WAPA's operations.

It also argues that a new Public Services Commission requirement that WAPA meet certain minimum filing requirements before asking for any further LEAC increases is unclear in scope and will lead to unnecessary delays, and that the commission's requirement that WAPA provide details regarding fuel diversification plans and energy efficiency exceeds the Public Services Commission's authority.

PSC Chairman Thomas Jackson said Wednesday he was hesitant to comment in detail because the Public Services Commission must remain objective leading up to the hearing, which he said should happen in mid-February.

"I've already instructed Georgetown to come prepared to defend their position," Jackson said.

When asked how rate-payers are supposed to deal with conflicting information regarding their utility company, Jackson said the February meeting, which will be open to the public, is "going to be addressing that specifically."

"I expect there might be fireworks," Jackson said. "You might want to wear your flak jacket."

- Contact reporter Lou Mattei at 714-9124 or email lmattei@dailynews.vi.

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